Thousands of staff at Sports Direct are on course to receive bumper bonuses after the pile-it-high-and-sell-it-cheap retailer told the City it was set to beat its profit forecasts and expects bumper sales ahead of next year's World Cup.

Sports Direct, controlled by Newcastle United owner Mike Ashley, set up the bonus scheme in the summer. It is open to all UK employees with at least one year's service and offers 25% of base pay, in shares, if underlying profits reach £155m in this financial year.

Today the retailer upgraded its predicted earnings to "at least" £155m. The shares would be released after two years for any staff who remain with the company.

Sports Direct reported half year profits down 41% to £58m, but most of the decline was attributable to adverse currency movements, and underlying profit before tax was ahead 39% to £72m.

Net debt, which had mushroomed after a series of acquisitions, has been reduced from £431m to £362m, with some of that improvement down to suspension of the dividend. Sports Direct shares closed down 7p at 99p – just a third of their flotation price nearly three years ago.

The company has set aside nearly £5m towards the cost of the bonus. A second bonus, dependent on profits and debt levels, offers even bigger rewards in the 2010/11 financial year.

Sports Direct operates more than 350 UK outlets and owns a raft of sports brands, including Slazenger, Lonsdale, Everlast and Dunlop.

Chief executive Dave Forsey said he was "pleased" with the group's performance in challenging conditions and said the retailer had "the World Cup to look forward to".

Group sales were ahead 10% to £757m, but revenue from brands was down 19% to £95m – partially a result of rival JJB cancelling orders for Sports Direct brands.

UK profit margins fell from 45.4% to 41.6%, which Sports Direct said was the result of £44m of foreign exchange losses on hedging-related arrangements.

The update from Sports Direct came as JJB named Keith Jones as its new chief executive. Jones, 45, is currently retail director at electricals chain DSG, the company behind PC World and Currys. He previously worked at Virgin and B&Q and is expected to join in the new year.

The chief executive's job at JJB has been vacant since former boss Chris Ronnie was suspended almost a year ago and later sacked.

The retailer was engulfed by financial crisis and needed a groundbreaking Company Voluntary Arrangement, allowing it to shed unprofitable stores, to avoid administration. It has since completed a £100m rescue fundraising. JJB's shares were unchanged at 25p.

JJB is now embroiled in an Office of Fair Trading investigation into alleged criminal price-fixing with Sports Direct. JJB acted as whistleblower, alerting the watchdog, in return for immunity.

Sir David Jones, Chairman of JJB Sports, said: "JJB has been through a lot in the past year but we have now reached a stage where we have the funding, the strategy and the team to plan for the future."

Sports Direct is also being investigated by the Competition Commission, over the purchase of 31 stores from JJB, and by the Serious Fraud Office, in connection with the price-fixing and fraud allegations.

It recently appointed Keith Hellawell as chairman. Hellawell, previously a police chief constable and the government's drugs "tsar", has had experience of negotiating with the SFO as he is also chairman of generic drugs group Goldshield, which was investigated for colluding to overcharge the NHS.

Sports Direct said it was continuing "to comply with the ongoing investigations of the CC, OFT and SFO".